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CSIQ vs. RUN: Which Stock Should Value Investors Buy Now?

Investors interested in Solar stocks are likely familiar with Canadian Solar (CSIQ) and Sunrun (RUN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Canadian Solar and Sunrun are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CSIQ has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

CSIQ currently has a forward P/E ratio of 6.28, while RUN has a forward P/E of 11.71. We also note that CSIQ has a PEG ratio of 0.20. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RUN currently has a PEG ratio of 0.67.

Another notable valuation metric for CSIQ is its P/B ratio of 0.74. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RUN has a P/B of 0.91.

These metrics, and several others, help CSIQ earn a Value grade of A, while RUN has been given a Value grade of C.

CSIQ sticks out from RUN in both our Zacks Rank and Style Scores models, so value investors will likely feel that CSIQ is the better option right now.

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Canadian Solar Inc. (CSIQ): Free Stock Analysis Report

Sunrun Inc. (RUN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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